No AFS License Needed until 2025: ASIC Extends FFSPs Transitional Relief Again

<p>The
Australian Securities and Investments Commission (<a href="https://www.financemagnates.com/tag/asic/" target="_blank" rel="follow">ASIC</a>) has made the decision
to prolong transitional relief for foreign financial services providers
(FFSPs). Initially, it was set to lapse in March 2024. Currently, these entities have until 31
March 2025 before they are mandated to obtain an Australian financial services
(AFS) license to conduct their transactions with the country's wholesale clients.</p><p>ASIC Extends Transitional
Relief for FSSPs</p><p>The
consideration of regulatory relief measures is underway, as FFSPs offer
Australian investors a gateway to worldwide investment opportunities and
introduce foreign investments to various sectors within the nation.</p><p>Implemented
through the ‘ASIC Corporations (Amendment) Instrument 2023/588’, this move additionally
postpones the activation of the ‘ASIC Corporations (Foreign Financial Services
Providers — Funds Management Financial Services) Instrument 2020/199’ until 1
April 2025. </p><p>This
specific instrument provides licensing relief for select FFSPs, allowing them
to offer funds management financial services to distinct groups of Australian
professional investors without the need for a local license.</p><blockquote><p lang="en" dir="ltr">ASIC is extending for a further 12 months the transitional relief for foreign financial services providers from the requirement to hold an Australian financial services licence when providing financial services to Australian wholesale clients <a href="https://t.co/TV5TQoQ8jK">https://t.co/TV5TQoQ8jK</a></p>— ASIC Media (@asicmedia) <a href="https://twitter.com/asicmedia/status/1688775962488676353?ref_src=twsrc%5Etfw">August 8, 2023</a></blockquote><p>“During
this extended transitional period, <a href="https://www.financemagnates.com/terms/a/asic/">ASIC</a> will consider new applications for
individual temporary licensing relief, or new standard or foreign AFS license
applications, from entities that cannot rely on the transitional relief,” ASCI
commented.</p><p>This change
means FFSPs that possess or are subsequently given a foreign AFS license can
persist in managing their financial operations in Australia under the approval
granted by ASIC.</p><p>This is not
the first time ASIC has decided to take such a step, and the deadline has been
pushed back for several years. <a href="https://www.financemagnates.com/forex/regulation/asic-extends-licensing-relief-to-foreign-financial-service-providers/" target="_blank" rel="follow">It happened in 2021</a>, then in 2022 and now in
2023. Earlier this year, <a href="https://www.financemagnates.com/forex/asic-drafts-reporting-rules-for-foreign-brokers-with-aussie-clients/" target="_blank" rel="follow">ASIC presented draft reporting rules for
foreign brokers</a> who offer their services to Aussie clients. The new rules are
expected to take effect in October 2024.</p><p>ASIC Reports $109 Million
in Civil Penalties</p><p>At the
beginning of August, the Australian regulator presented a report summarizing
its activities <a href="https://www.financemagnates.com/forex/asic-reports-109m-in-civil-penalties-and-144-ongoing-cases-after-h1-2023/" target="_blank" rel="follow">for the first six months of 2023</a>. ASIC's enforcement update
highlighted over $109.1 million in civil penalties in the half-year up to June 30,
2023. During this period, 125 individuals were charged, 70 investigations were
initiated, and another 144 investigations are currently ongoing.</p><p>"Promoting
market integrity and addressing misconduct that places consumers and investors
at risk are enduring priorities for ASIC," Sarah Court, the Deputy
Chairwoman of ASIC, commented. "Our commitment to insider trading and
market manipulation deterrence continues, and we expect further action for
related misconduct in the coming months."</p><p>In addition
to direct enforcement actions, ASIC published an update on its
interventions <a href="https://www.financemagnates.com/forex/asic-heralds-12-enforcement-priorities-for-2023-including-crypto/" target="_blank" rel="follow">against greenwashing</a>, urging financial institutions to improve
their anti-fraud strategies. In one of its latest enforcement actions, <a href="https://www.financemagnates.com/institutional-forex/asic-pursues-vanguard-australia-in-greenwashing-lawsuit/" target="_blank" rel="follow">ASIC
sued Vanguard Australia</a> for allegedly misrepresenting the <a href="https://www.financemagnates.com/terms/c/compliance/">compliance</a> of some of
its investments with environmental, social, and corporate governance (ESG)
standards.</p>

This article was written by Damian Chmiel at www.financemagnates.com.